AIB We have won the Prevailing Rate issue

reggie3234 said:
Where do you see your tracker defined at ECB +0.75%? Looked in my contract but not defined in part 1
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Where you ever on a tracker? If so, it will clearly outline the margin. Don't have the docs with me now, so can't say what page/section, but it's the section that describes the details of the loan (rate, amount, duration etc)

If you were never on a tracker, then it may be difficult to specify the exact margin you should be on. but you should definitely try and find out what margin was applicable at the time you took out the loan.
 
Thank you so much Brendan you have literally saved our lives here. I do not say this lightly our family has been through a very tough time and this payment gives us hope that things are looking up at last. Thanks for everything from my family to yours.
 
Hopefully AIB will pay compensation sooner rather than later. Should we as mortgage holders be instructing the Bank to move these mortgages to tracker, pending compensation?
 
So this is a preliminary decision by the ombudsman.

Does anyone know when this becomes a final decision? My understanding is AIB have 35 days to appeal once the decision takes the status of 'final' (rather than preliminary). Would be good to know when the clock starts counting down those 35 days.
 
Brendan Burgess said:
Hi coolaboola

As the Ombudsman's decision is still a preliminary decision and has not been finalised or published, I cannot discuss this.

As a very rough guide and it's very rough - it's costing €300m for 6,000 customers. That would work out at around €40k per average customer who probably had an average mortgage of €300k. (It's €50k but it will cost AIB a lot in administration and they have probably overprovided as well..)

Brendan
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Hi Brendan. Excuse my asking (I am no financial expert) but is that not a little simplistic. Wouldnt there be cases where AIB paid the €1600 compensation to customers who fell into the categories you mentioned in another post but who would not have benefited at all from taking a tracker at the time over SVR?

I received a cheque for €1600. I remember being surprised at the time as I remember that at the time we took our mortgage the tracker rates (still on offer) were already getting ridiculously high. In fact from memory when we fixed the rate was significantly lower then the tracker so I can only assume I was one of the lucky ones that got a cheque as they should have offered some tracker at end of fixed rate but didnt (even though I probably would not have taken it).

So realistically I would expect that wouldnt they assess each account and have to pay out any redress based on models predicting what each account holder would have saved plus compensation?

In my case there was probably no savings but would assume (at best) another minimum compensatory amount?

I do apologise if above doesnt make sense. I do remember checking with the bank to make sure I was entitled to the first cheque as I wasnt sure and they assured me I was.
 
rustbucket said:
s I remember that at the time we took our mortgage the tracker rates (still on offer) were already getting ridiculously high. In fact from memory when we fixed the rate was significantly lower then the tracker so I can only assume I was one of the lucky ones that got a cheque as they should have offered some tracker at end of fixed rate but didnt (even though I probably would not have taken it).
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rustbucket said:
In my case there was probably no savings but would assume (at best) another minimum compensatory amount?
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I've picked a random example that matches your criteria.

In June 2008, the >60% LTV was 5.5%. that was ECB + 1.25%
The 3 year fixed rate was 5.25%

If you were on tracker, your rate would have been 1.25% for the last 4 years. <2% for the 3.5 years prior to that. What rate have you been paying?

There'll be very few cases where the redress is "another minimum compensatory amount?"
 
rustbucket said:
Hi Brendan. Excuse my asking (I am no financial expert) but is that not a little simplistic. Wouldnt there be cases where AIB paid the €1600 compensation to customers who fell into the categories you mentioned in another post but who would not have benefited at all from taking a tracker at the time over SVR?

I received a cheque for €1600. I remember being surprised at the time as I remember that at the time we took our mortgage the tracker rates (still on offer) were already getting ridiculously high. In fact from memory when we fixed the rate was significantly lower then the tracker so I can only assume I was one of the lucky ones that got a cheque as they should have offered some tracker at end of fixed rate but didnt (even though I probably would not have taken it).

So realistically I would expect that wouldnt they assess each account and have to pay out any redress based on models predicting what each account holder would have saved plus compensation?

In my case there was probably no savings but would assume (at best) another minimum compensatory amount?

I do apologise if above doesnt make sense. I do remember checking with the bank to make sure I was entitled to the first cheque as I wasnt sure and they assured me I was.
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The fixed rate may have been slightly lower than a tracker in 2008 but after the crash and the subsequent reductions in the ECB base rate trackers became much cheaper than any other product the banks were offering. Why do you think the tracker scandal has cost the them so much money? Unless someone sold up or lost their house very soon after the crash they will be getting a lot more than a "minimum compensatory amount". Brendan's rough calculation seems very close to the mark to me.
 
RedOnion said:
I've picked a random example that matches your criteria.

In June 2008, the >60% LTV was 5.5%. that was ECB + 1.25%
The 3 year fixed rate was 5.25%

If you were on tracker, your rate would have been 1.25% for the last 4 years. <2% for the 3.5 years prior to that. What rate have you been paying?

There'll be very few cases where the redress is "another minimum compensatory amount?"
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thank you for the response. I am unsure now what rate we were paying as the mortgage property in question was sold in 2016. We now have a different mortgage with AIB.

I assume we are in the category of customers where ‘service failures’ applied. I will dig out whatever info I can find but am not hopeful of finding any. Again thank you for the response
 
Brendan Burgess said:
Just to be absolutely clear. My calculation is not based on the preliminary decision as that is still preliminary and still confidential.

My calculation is based on AIB's estimate.
€300m total cost
6,000 customers.

That is all it is.

Brendan
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That is calculation is on refunds, but people with 10 or 15 years left on their mortgages are actually saving thenselves alot more in future interest payments. A really great result for any parties impacted.
 
Brendan Burgess said:
Just to be absolutely clear. My calculation is not based on the preliminary decision as that is still preliminary and still confidential.

My calculation is based on AIB's estimate.
€300m total cost
6,000 customers.

That is all it is.

Brendan
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Brendan when will we know if AIB appealed the preliminary decision? You would think that if they’re planning to appeal it would be at this stage as opposed to after final decision issued to avoid high court challenge along with the negative publicity that will bring?
 
misstealeaf said:
Brendan when will we know if AIB appealed the preliminary decision? You would think that if they’re planning to appeal it would be at this stage as opposed to after final decision issued to avoid high court challenge along with the negative publicity that will bring?
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Reading between the lines there will be no appeal. There is no way in hell AIB would release that message that it did and spook its stock holders unless it was resigned to paying out the redress. In my opinion there is no chance of an appeal or high court etc, the decision is made
 
coolaboola12 said:
Reading between the lines there will be no appeal. There is no way in hell AIB would release that message that it did and spook its stock holders unless it was resigned to paying out the redress. In my opinion there is no chance of an appeal or high court etc, the decision is made
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No public listed company would set aside the money and then appeal after scaring the investors, that would be the awful management.
 
coolaboola12 said:
No public listed company would set aside the money and then appeal after scaring the investors, that would be the awful management.
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That’s a fair point alright. The statement did say though they’re aware things could go a number of ways so it was just on that basis I was thinking an appeal. I know auditors wouldn’t allow a provision in accounts either unless fair likelihood of it being needed. Please god it falls our way.
 
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